Question: Based on the historical returns shown below, what is the covariance of returns for stocks G and H? (Hint: find out the expected return for
Based on the historical returns shown below, what is the covariance of returns for stocks G and H? (Hint: find out the expected return for two stocks first; and then apply the historical data covariance formula. It is actually the same as the example in PPTs. Just be patient with your calculation.) Year G return H return 2019 15% 2020 -10% 2021 13% 1) -38.0%% 2) 18.4%% 3) -28.2%% 4)-22.0%% -6% 11% 22%
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
